Outdoor, Utility-Focused Brands Surging in Popularity

“Practical fashion” has become popular with millennials, benefiting outdoor, utility-focused brands like Patagonia, The North Face (VFC) and Fjällräven. The latest shift in fashion trends have consumers seeking out durable clothing that serves a purpose, even if it carries a higher price tag; as opposed to cheap products, made by fast-fashion retailers, only designed for a single season of wear. The sustainable fashion trend is being attributed an age group of consumers that struggled through the most recent recession, becoming more conscious of their spending in the process.

Howie Long-Short: While VF Corp. (VFC) reported Q4 ’17 sales grew 20% YOY (to $3.6 billion), the company reported a quarterly net loss of $90.3 million ($.23/share) after a one-time charge related to new tax legislation. Excluding one-time items, the company earned $1.01/share. As for 2018, the company intends on becoming more direct-to-consumer and digitally focused; projecting 85% of their overall sales growth to come from those initiatives. VFC shares are up 39% over the last 12 months. For information purposes, Fjällräven is a subsidiary of Fenix Outdoor International AG, which trades on the Stockholm Stock Exchange under the symbol STO: FOI-B. Patagonia is a privately-held enterprise.